Britain has an illegal tobacco problem. Our research found that 31 per cent of adults say they have been offered illegal tobacco, 85 per cent have heard of it and 82 per cent think not enough is being done to stop it.[1]
In the UK, legal duty-paid tobacco volumes have fallen by 52 per cent since 2021, on HMRC’s own figures[2]. Smoking rates have fallen too, but far more slowly. As shown in the Smoking Toolkit Study, tobacco smoking prevalence fell from 16.9 per cent in 2021 to 14.9 per cent in 2026, representing a 2 percentage point reduction, or an 11.8 per cent relative decline over the period.[3] Years of cuts to enforcement, alongside sharp rises in the tax on legal cigarettes, have turned Britain into a goldmine for the criminals running the illegal market. Legal sales are collapsing and the reason is simple: push the price of a legal pack high enough and many smokers do not quit, they go underground. Criminal sellers profit, while honest shopkeepers and the taxpayer pay the price.
Despite growing concern from retailers, enforcement agencies and policymakers, we remain in largely the same position as we were a year ago: debating the scale of the problem rather than agreeing what is needed to tackle it.
This is a major issue. You cannot fix what you cannot measure, and right now no one can agree how big the black market is, or even how to measure it accurately. You cannot even tell whether the illegal market is growing or shrinking if the people counting it keep arriving at wildly different answers.
Let’s take cigarettes as an example. HMRC publishes official estimates, while we conduct our own Pack Swap research, and Action on Smoking and Health and other organisations carry out their own studies. There is also the Empty Pack Survey (EPS), funded by the industry as a whole, in which researchers collect discarded cigarette packets from the street and assess whether they are legal (UK duty-paid) or came from elsewhere. In 2024/25, EPS found that 46 per cent of cigarettes in the UK were not duty-paid[4]. Our Pack Swap survey estimated 34 per cent for the same period[5]. Not all of these cigarettes will have been bought illegally, some were likely purchased abroad by those travelling. But the greater point is that when compared to HMRC’s estimate of 16 per cent[6], we are generating drastically different results when measuring the same problem.
HMRC’s official estimate is based on a model, resting partly on survey data about how much people say they smoke, which carries a significant margin of error. The government themselves note that the uncertainty rating for the tobacco tax gap estimate is ‘high’[7]. This is not a critique of the government’s model. All survey methodologies have individual limitations, but the significant discrepancy between their data and the industry’s own raises concerns because it affects how policymakers and enforcement bodies determine how and when action is taken.
As the price of tobacco continues to rise, that measurement discrepancy is getting bigger. The latest results from EPS estimate a concerning 71 per cent of cigarettes in the UK were not duty-paid[8], with our Pack Swap data at 42 per cent for the same period[9].
Until we can agree how to measure this market, we cannot fix it. Every month we spend arguing about the size of the problem is another month our high streets lose out and the criminals behind it keep profiting at the public’s expense.
Government, enforcement, public health, retailers and industry need to come together to agree on one thing: a single, transparent and accurate way of measuring the black market so that we can actually say whether the market has grown or diminished.
This should not be a debate about whose number is right, but a shared effort to build the most reliable picture possible. Then we can make real progress on shutting the illegal tobacco trade down.
[1] All survey data is based on an online survey conducted for JTI UK by an independent British Polling Council accredited research agency between January 7 and January 29 2026, involving a sample of 15,228 UK adults aged 19 and over, including 5,444 smokers. To ensure the findings are representative of the UK general population, the data was weighted by age, gender and region.
[2] Institute of Economic Affairs analysis of HM Revenue & Customs, Tobacco Bulletin, March 2026. The analysis found that legal tobacco sales fell by 52 per cent between 2021 and 2025. https://www.gov.uk/government/statistics/tobacco-bulletin
[3] https://www.smokinginengland.info/graphs/top-line-findings
[4] Ipsos, Empty Pack Survey 2024 Q2. The survey found that approximately 46 per cent of cigarettes consumed in the UK were non-UK duty paid, including illicit, smuggled and cross-border products. Study available on request.
[5] JTI Pack Swap Survey, September 2025
[6] HM Revenue & Customs, Measuring tax gaps tables 2026, Table 3.20. 2024–25 column. NUKDP is calculated as 4% duty-free consumption plus 12% illicit consumption, totalling 16%. https://www.gov.uk/government/statistics/measuring-tax-gaps-tables
[7] HM Revenue & Customs, Measuring tax gaps 2026 edition: Methodological annex, June 2026 https://www.gov.uk/government/statistics/measuring-tax-gaps-methodological-annex/1-tax-gaps-summary
[8] Ipsos, Empty Pack Survey UK Q2 2025, September 2025. Study available on request.
[9] JTI UK, Pack Swap Survey, June 2026
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